from the representative from Washington, who was in southeast Missouri with the area supervisor. He is a ginner. He says: Mr. Slack, who was representative of Farmers' Home Administration, said that from the information he has received from me and others in this area that he realized there was a need for some help in addition to what they were now doing. At the same time he said that in other disaster areas in years past they had never done anything about open accounts, and wondered how far the thing would go if it was started here. He also has his doubts as to how the program could be administered. Then this man operates an implement and tractor place. He said: "We were just in many areas completely wiped out," and the need for the credit. This man is a seed and grain dealer and operates a gin. He said: I have made it clear to their representative that in my opinion the only solution to the problem now facing our farmers was a capital loan over a period of from 3 to 7 years, allowing them to consolidate both their secured and open indebtedness on an individual basis. This is the same view that I expressed in a letter to the local Farmers' Home Administration office on June 18, 1957, and the situation is much, much worse than it was at that time. Incidentally, Mr. Smith made two trips down to southeast Missouri. One was in the spring, after the spring rains and we thought we were in trouble, and then he made another one back there in the fall when we were in still worse trouble, because we could not get the small crop out after we had gotten it planted. After I got back to Washington, I talked to Kenneth Scott, down in the Department, and without committing himself of course I explained to him about the type of legislation which I felt was needed— Mr. Scott said at that time that they realized that there was an area of credit which was not being met, either by the Small Business Administration or by the enlarged liberalized policies of the Farmers Home Administration. I think the whole thing resolves itself into this: "They say we have never made any loans for open accounts. Well, of course, there are a lot of things we have never done before. But I feel like the group of Senators did who went down to the White House a few weeks ago. And it happened that in that group were Senators who have throughout the years supported this foreign-aid program; some of them who have been most active in that program; and they put it up to the White House in this way: That, as long as they were supporting the program that they were, they were put in a most embarrassing situation of being unable to explain to the people in the States that they represented why it was good business to try to rebuild some foreign economy, where we were making just outright gifts, and trying to take care of, if not all, at least some of their needs, why the administration was unwilling to make available just a small fraction of that much money which was going to be secured by a note which our people who were in just as bad trouble, where they were willing to sign the note and pay back the money, why that could not be done. I have tried to approach this thing from a businesslike angle. I do know that the need is there. I know that Small Business is not going to take care of the needs of many of these small business firms. Most of them are individual people doing business. Those people are going to be out of business. I know that the philosophy of a lot of people, including some of the people in the Department of Agriculture, toward those people is like it is toward a lot of our small farmers. They say: "After all, that fellow that ran that little STATEMENT OF HON. FRANK CHELF, A REPRESENTATIVE IN CONGRESS OF THE FOURTH CONGRESSIONAL DISTRICT OF THE STATE OF KENTUCKY Mr. CHELF. Mr. Chairman, you are very kind, you and Mr. Watts and my other colleagues. You know we folks who are not officially members of your great Agricultural Committee are indebted to you good people, and I am sincere about this, for your great consideration for those of us who represent tobacco areas who are not members of the Agricultural Committee, to permit us to come in here and to participate. I mean it is really wonderful. And we not only enjoy being associated with you, but to be able to contribute what good we may to this fine program that we have now and have had in the past. Mr. Chairman, my interest in this particular piece of legislation is very deep because I think that the gentlemen here who represent the Department of Agriculture will bear me out when I say to you quite frankly that the great congressional district that Mr. Watts, my colleague, has the honor to represent, which covers the famous bluegrass section of Kentucky, and my great district, the fourth, which is contiguous and adjoining it, the 2 of us together raise approximately 75 percent of the total burley crop of Kentucky, which in turn produces, I think, in the neighborhood of around 67 to 68 percent of the total burley crop of the world. And so, therefore, we have a vital stake in this thing. For that reason I was delighted to join with my colleague, Mr. Watts, and others in this move here to stop an insidious thing that may like a rat gnaw its way through our entire program. That is exactly what this thing will do if we permit it to go on. It is only 5 million to 15 million pounds now. I can envision it will not be too long until the word gets around, Joe is raising and getting away with it, then Jack will do it next door and then down the line, the road it goes and county after county and the first thing you know, we haven't any program. I appreciate your courtesy in letting us come here, and to be heard. I will make a little formal statement on this in a few moments, if I will be permitted to do so. But I would like to ask Mr. Williams for the sake of the record: Has there been any check as to the nicotine content on this sucker tobacco? I am told that the nicotine content in the sucker tobacco is much higher than the normal. Mr. WILLIAMS. There has been. One company made a test. Mr. ELLIS. We have been informally furnished by some of the manufacturers' chemical analyses of the sucker samples that they have taken, their own results. And the suckers are distinctively different in their chemical constituents. To single out any one element such as the alkaloids, would oversimplify the question of the significant chemical difference between the second-crop tobaccos and the first-crop tobaccos. Mr. CHELF. Thank you. Mr. Williams, do I understand that the Department feels that under existing law they cannot cope with this thing, in other words, you must necessarily have this legislation in order to stop this second growth crop? Mr. WILLIAMS. Let me say it this way: The entire Kentucky delegation, senatorial delegation and the House, most of them have requested that we meet this problem administratively. At the request of these gentlemen we went to our attorneys, and they turned it down under administrative regulations. We notified these gentlemen that we could not handle it from the administrative standpoint. As the result of that, these bills were introduced. Mr. CHELF. In other words, you feel that it is a must that this legislation be enacted into law, if we are going to cope with this situation? Mr. WILLIAMS. Let me get back to this. The Department has not taken any position, but under the present-under present law as our attorneys interpret it, we have no way that we can deal with the problem. Mr. CHELF. There isn't any doubt if this thing is allowed to grow and expand and develop but that it will eventually destroy our entire tobacco program? Is that a fair statement? It is is allowed to go on and on and on unchecked? Mr. WILLIAMS. My personal opinion is that it would be detrimental to the future of the program. That is not the Department's position, but my personal position is that every pound of suckers that enters into trade is harmful to the overall burley program. Mr. CHELF. The more buildup we have of our so-called supplies, the more trouble we find ourselves in. Mr. WILLIAMS. Well not only the supplies but if the quality were the same it would not be as bad, but you are substituting an inferior quality for something superior upon which our foreign trade is really built. Mr. CHELF. Thank you very much. Mr. Chairman, in order to conserve time may I be permitted to insert this in the record? Mr. ABBITT. Yes. Put it in the record as though read. Mr. CHELF. My name is Frank Chelf, representing the Fourth Congressional District of Kentucky. I appear here today in the interest of my bill, H. R. 11063, and all similar bills which prevent the sale of what is known as "sucker" tobacco. Frankly, since my colleague, the Honorable John Watts of the Sixth District, introduced the first bill on this subject, I feel that his bill should be given priority in your deliberations. While the sale of "sucker" tobacco is not a common practice, nevertheless, there has been a marked increase in the sale of "sucker" tobacco within the past few years. Its "weight" and its influence has been felt on the market. Due to the industry's great use, at the present time, of a lower type of tobacco-used with filter cigarettes"sucker" tobacco, therefore, has had a ready market. As a result, this tends to overstock the tobacco market and harms the sale of higher-quality tobacco which, in the final analysis, results in a penalty to those who live, respect, and abide by our present very fine tobacco program. In my opinion, if the sale of "sucker" tobacco is permitted to remain unchallenged, serious injury will result to the tobacco program that we have all fought so hard to preserve and protect-it is the cash crop and, therefore, the lifeblood of my farmers. All of us who introduced this legislation feel that existing law prohibits the sale of "sucker" tobacco, but since the Department of Agriculture does not agree, we have drafted this legislation to show the absolute intent of Congress to prevent "sucker" tobacco from becoming competitive and, thereby, injurious to our entire tobacco program. Mr. ABBITT. Thank you very much, Mr. Chelf. Mr. Spence, we are delighted to have you with us here today and know of your great interest in this tobacco program and we deeply appreciate your coming, and will be glad to hear from you. STATEMENT OF HON. BRENT SPENCE, A REPRESENTATIVE IN CONGRESS OF THE FIFTH DISTRICT OF THE STATE OF KENTUCKY Mr. SPENCE. I have no statement to make, Mr. Chairman. I am deeply interested in the problem that is before you, because for the great majority of my farmers the cash crop is burley tobacco. I am interested in this legislation. Mr. Watts introduced a bill and suggested that I introduce a similar bill, which I did with pleasure. I understand that the second crop produces inferior-grade tobacco. Of course, if that comes in contact with the good tobacco, it depreciates the price. I think that is an economic law that cannot be denied. And I think this is a very important question that you have to decide. There ought to be some control of the planting of the crop-the second crop on the allotted acreage. I think that is a very important question to be solved for the benefit not only of the growers, but I think it would depress the price, but our foreign market should be considered. If you send an inferior tobacco to them, it will probably have a tendency to ruin the market. And I know this able committee which has made a great study of this question will come to some right solution that will give it help and the protection to our farmers that they need. I have enjoyed this hearing very much. I come here partly to learn something of the conditions with regard to the bills. It has been a very interesting hearing. I feel complimented that you gave me the opportunity to come here. Mr. ABBITT. We appreciate your coming and we deeply appreciate your interest. Mr. SPENCE. I have a hearing of my own committee, and I have to go. Mr. ABBITT. We appreciate your coming. I would like the record to show that Senator Cooper from Kentucky expressed his regret that he could not be here today. He wanted me to say, however, that he has introduced a similar bill in the Senate and made a statement explaining it on the floor of the Senate. He was not able to come; his assistant, Mr. Guard, is here. Mr. JENNINGS. I don't have any questions. There is something I would like to discuss for a few minutes with Mr. Williams after we have completed here. Mr. BASS. Mr. Chairman, may I make another statement? Mr. BASS. I have always been able to agree with the subcommittee here on just about everything we have ever done and Mr. Watts, who is a great champion of burley and other tobacco, has been a great help to us on the committee. He and I have always agreed in prin up the debt of 2 or 3 or 4 or 5 years ago, but only for those essential debts created last year which would have been paid if the fellow had had a normal operation, but which he could not pay because of this disaster which he suffered due to the unprecedented rains and floods. Mr. HARRISON. This would be somewhat of a disaster loan, then? Mr. JONES. Oh, yes; it would be of that type and would only be available in those areas where they had been declared disaster areas because of this flood. Mr. HARRISON. Thank you. Mr. POAGE. Are there any further questions. If not, thank you. Mr. JONES. Thank you, Mr. Chairman. Mr. POAGE. We will hear Mr. O'Hara of Minnesota right now. STATEMENT OF HON. JOSEPH P. O'HARA, A REPRESENTATIVE IN CONGRESS OF THE SECOND DISTRICT OF THE STATE OF MINNESOTA Mr. O'HARA. Permit me to thank Mr. Gathings and you, Mr. Chairman. I shall be rather brief. I want to say at the outset I introduced companion bills after Mr. Gathings and Mr. Jones had introduced their original bills. Mine is similar, identical with the bill which Mr. Gathings had previously introduced. I did so because they had been aware of the disaster area which I had in my own district, and because I think there is a need for legislation for those people who are affected. Permit me to say that I am asked by my colleague Mr. H. Carl Andersen to ask the chairman for permission to insert a statement in the record in support of this type of legislation. Mr. POAGE. Without objection that will be granted. (The information referred to is as follows:) STATEMENT OF HON. H. CARL ANDERSEN A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MINNESOTA Mr. Chairman, I again want to thank you and the members of your committee for this privilege of testifying on legislation before you for your consideration. I will be brief as I know the interest of every member of your committee in this subject, and I have confidence that you will do what is in the best interests of American agriculture. I also have great confidence in my colleagues who are the authors of the bills before you, and I know they put a lot of time and thought into the development of these proposals. As you know, I came before you last year to testify in behalf of some kind of general legislation to provide more effective credit assistance in the agriculturai areas hard hit by natural disasters. At that time, I suggested the establishment of a revolving fund in the hands of the Farmers' Home Administration with very broad authority for the making of loans in disaster areas. It has been my feeling that we need such authority on a permanent basis because every year, at one place or another, some form of natural disaster strikes farms and farm people. If it is a disaster of major proportions affecting a great many people. the Congress is inclined to act on some emergency legislation for that particular area. On the other hand, if it is a limited disaster affecting only a small area or only a few farm people, it is not always easy to get the Congress to act. My thinking is that a farm, a township, a county, or even several States hurt by a disaster should all be treated alike. An individual whose farm is the only one devastated by rain, floods, hail, etc., is just as much in need of help as he would be if his loss was shared by thousands of other farmers in a widespread disaster. That is why I have urged general, permanent legislation with broad discretionary authority. The bills before you deal with credit assistance in only those areas designated as disaster areas. This limitation has merit, as I feel that the regular credit |